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Exposing Workplace Fraud: Informants Are Willing But Procedures Are Weak

Jan 13, 2005

Compiled ByDeborah Austin Eighty percent of American workers would willingly blow the whistle on workplace fraud. And with workers estimating that firms lose 20% of earnings to such fraud, wise employers should leverage that willingness to defend company assets, suggests professional services firm Ernst & Young LLP. In a survey of 617 American workers, professional services firm Ernst & Young, New York, found 21% are personally aware of fraud in their workplace. But only 43% of those have reported it. Of employees surveyed, 44% said management could better enable whistle-blowing -- through tougher sanctions (59%); better role models/leadership (58%); better communication about taboos (56%); better investigation (56%); and improved new-employee screening (54%). Overwhelmingly, workers said anonymity was the best motivator for informers -- whether by phone call (30%); hotline (27%); letter (20%) or Web site (16%). But management inaction will stymie even the best reporting mechanisms -- "because by default, fraud becomes acceptable behavior" - warns Stephen Seliskar, a leader in Ernst & Young's Fraud, Forensic & Investigation Services group.